International Trade Issues Texas Agriculture Parr Rosson

International Trade Issues & Texas Agriculture Parr Rosson Professor & Director Center for North American Studies Department of Agricultural Economics Texas A&M University

Trade Issues & Texas Agriculture WTO Negotiations Complete NAFTA Implementation 2008 Trade Agreements Cuba Export Opportunities Trade Disruptions

World Population Billions ME NA 8 AFR WE LA I. ASIA Ind. + 8%, Dev. + 31% TOTAL EE/FSU 7. 6 D. ASIA 8 6. 5 6 6 4 4 2 2 0 0 1990 2000 US Census Bureau 2001 2006 F 2010 F 2015 F 2020

World Economic Output GDP, Trillion 1997 Dollars $70 NA WE I. ASIA EE/FSU $60 D. ASIA ME AFR CSA $50 Ind. + 64%, Developing + 140% $40 $30 $20 $10 $0 1990 2001 F 2005 Global Insight, Inc. , World Economic Outlook, 2002. F 2010 F 2015 F 2020

U. S. Tariffs, 1789 -2004 70 Percent 70 Tariff of Abominations, 1828 Smoot-Hawley Tariff, 1930 60 50 Morrill Act, 1861 50 Generalized System of Preferences, 1968 40 30 WTO, 1995 20 10 60 Fordney-Mc. Cumber Tariff, 1922 GATT, 1947 0 1789 1816 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 Statistical Abstract of the United States 40 30 20 10 0

World Average Agricultural Tariffs, 2002 Percent 140 Region Average World Average 115 120 85 100 80 62% 55 60 40 30 40 25 10 20 Source: WTO & ERS/USDA es St ni te d U A h or t N at ic m er ni Eu ro pe a n U m er A h So ut a on a ic m er ra en t C C ar i bb ea n l. A Is A la nd sia s 0

Since 2000 Exports + 30% Imports + 50%

World Trade Organization Doha Development Agenda (2001 -06)? Agreement on Reductions by April 30, 2006 Did Not Happen Draft Schedules Due July 31, 2006? Conclude Negotiations December 31, 2006? ? Trade Promotion Authority Expires July 2007

CUSTA, ‘ 89 CAFTA-DR ‘ 05 Jordan ‘ 01 Bahrain ‘ 05 NAFTA ‘ 94 Israel ‘ 85 Morocco ‘ 04 Thailand ‘ 06 S. Korea Panama ‘ 06 MEFTA ‘ 06 Andean FTA ‘ 06 FTAA ? Singapore ‘ 03 Chile ‘ 04 Southern African Customs Union ‘ 06 U. S. Trade Agreements Australia ‘ 05

Million Dollars

Ag Exports $3, 363 million Texas Ag Export Impacts Business Activity ($ M) $6, 558 Income ($ M) $2, 724 Jobs (#) 88, 875

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Observations Disparity in Population & Income Growth Disparity in Use of Trade Barriers Disparity in Agricultural Trade Growth China Emerging as Major Market & Economic Force

Observations Questions About Role & Future Importance of Trade WTO Agreement Important Open Markets Eliminate Export Subsidy Distortions Minimize Litigation Over Farm Policy Fruit/Vegetable Issues Ag Exports Important to Texas Economic Growth, but Concentrated in Certain Regions

Conclusions & Implications U. S. Market Is Open, Rest of World Is Not U. S. Export Growth Lags Import Growth If Trade Growth is Important, Disparities Must Be Addressed Progress in WTO Important to U. S. & Texas for at Least 2 Reasons: Markets Farm Policy

Conclusions & Implications Absent WTO Progress, Expect More Litigation in WTO Aimed at Farm U. S. Policy Trade Agreements Likely Important Way to Address Market Access Trade is Important Growth Component of Texas Economy

Thank You! Parr Rosson Department of Agricultural Economics Texas A&M University College Station, TX 77843 -2124 Telephone: 979 -845 -3070